The talks between IMF team and Pakistani authorities are in the final stages and IMF has set tough conditions for Pakistan in order to receive a bailout package from the International lender.
According to the sources, the three major demands from IMF includes the increase in General Sales Tax (GST) by 18 percent, further devaluation of Rupee and tight monetary policy.
The IMF team has been conducting meetings with government officials to get the feedback on their proposed reforms, the government, however, made it clear that the conditions impacting the country’s welfare and sovereignty wouldn’t be accepted.
The officials said that the government is already working towards economic reforms including tax collection, tax reforms, a better monetary policy which is in the government’s and economy’s interest, however, implementing IMF terms and conditions could adversely affect the economic growth, jack up inflation and unemployment rate in the country.
According to the sources the IMF team is going to stay in Pakistan for two more days until 22nd of November, within this time the IMF team is expected to chalk out the plan and Memorandum of understanding (MoU) along with the Memorandum of Economic and Financial Policies (MEFP) as well as the Letter of Intent (LoI) in order to release the loan and reach terms and conditions.
The LoI and MEFP would be signed by the parties if both parties agree to the terms and conditions, the government is also focusing on alternative financial sources, Prime Minister Imran Khan’s visit to the United Arab Emirates (UAE) brings in new hopes for the country. It was also reported that UAE has responded positively for the financial assistance package for the country which most likely is a comparable package as of Saudi financial aid to Pakistan.
Secondly, PMs visit to Malaysia is also eying major financial breakthrough for the country. Pakistan is in a strong negotiation position with the IMF after these developments, the government may not need a loan from the lender if they ask to impose tougher conditions on the economy.